Universal Corporation announced that its subsidiary Tabacos del Pacifico Norte S.A. (TPN) will be increasing its purchases of leaf tobaccos in Mexico, as part of a new leaf supply arrangement for Mexico with Philip Morris International Management SA (PMIMSA).
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Previously, the purchase and processing of these tobaccos was handled directly by a subsidiary of Philip Morris International Inc. Starting with the upcoming 2015 crop, PMIMSA will purchase processed grades of tobacco from TPN.
The new arrangement is expected to provide important supply chain efficiencies and is indicative of PMIMSA's and Universal's strong commitment to the grower communities in Mexico and PMIMSA's intent to remain a major purchaser of Mexican-grown leaf tobacco. Universal has managed operations in Mexico since the 1960s.
Mr. Freeman stated, "This new arrangement is a meaningful example of our efforts to implement tailored solutions that benefit our company, our longstanding global business partners, and our grower communities. We are very excited to be a part of this undertaking and welcome the opportunity to more efficiently support the tobacco supply chain in Mexico.
"We believe that global leaf suppliers add efficiencies to the markets through economies of scale as well as through the vital role we play in finding buyers for all styles and leaf grades of tobacco.
"As a result of PMIMSA's changes to their leaf acquisition models in both the United States, as announced in November 2014, and now in Mexico, we expect financial benefits for our North America segment beginning in fiscal year 2016." ■
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